Have payment networks evolved to match the importance of e-commerce in this mobile-first, global world? Five payments gurus give their views
One can wax lyrical about how e-commerce is taking over and replacing brick-and-mortar stores, but ultimately what determines the success of e-commerce is getting the money from customers to merchants — in other words, payment. Nobody is going to set up an online store if they aren’t able to get their customers to pay them for their goods and services.
As Echelon is basically a tech and business convention, with a large part of it about bringing together for-profit companies for commerce, it is hence fitting that e27 chose this topic to round off the conference. This said, let’s take a look at the panelists below:
- Danny Crichton (Moderator) – Writer, TechCrunch
- Elias Ghanem – Co-Founder and CEO, Telr.com
- Gilberto Arredondo – Chief Commercial Officer, fastacash
- Paul Leishman – COO, Coda Payments
- Rahul Shinghal – Country Manager, Southeast Asia, PayPal Asia Pacific
Where’s Asia’s Stripe, Square, or Braintree?
The first question is asked by a member of the audience, and concerns why Asia hasn’t produced a payments startup like Stripe, Square, or Braintree. According to Leishman, the underlying infrastructure Stripe and Square is built on, the credit card payment system, is not yet mature in Asia, particularly in the less-developed regions away from big cities.
Shinghal, in contrast, believes that the complex currency and regulatory landscape is more to blame, noting that different countries have varying levels of money control. Ghanem agrees, adding that localisation is a key thing for Asian payment startups, and that such specialisation makes it hard for them to scale regionally.
Localise, localise, localise
With so many languages and currencies, Southeast Asia is considered by many as a complicated, fragmented market. How to crack this market is the theme of the next question, asked by Crichton. Arredondo suggests that payment companies can find local partners like banks to work with, with each country having a different partner. For Shinghal, he recommends companies to look at commonalities between markets, so expansion can be done without needing to cater to each market separately.
For Leishman, he wants companies to go back to the basics: What is the product market fix? He believes that no two countries are the same, and that in-depth knowledge of each country is needed for successful expansion. Finally, Ghanem notes that localisation rules, and that offering users the local language and currencies creates a better user experience for them.
Marketplace dynamics: Focus on merchants or consumers?
The following question from the audience concerns whether payment companies should pay more attention to the customer or the merchant side. This question throws up many answers, with Leishman commenting that for Coda, they focus more on the merchant and telco side and not so much on the customers’, as the telco takes care of them. Shinghal disagrees, saying that it’s a chicken-and-egg problem where a good consumer base attracts merchants and vice versa.
As for Ghanem, he notes that Telr only interacts with the merchants, though it strives to make sure that its customer experience is good, and takes the effort to educate merchants about the importance of user experience, which translates to greater conversion. Lastly, Arredondo avers that it’s all about finding decision-makers with strategic minds and vision to appreciate the importance of payments systems.
The payments industry is moving faster, keep up or be swallowed
The final question is regarding what threats the payments industry in Asia currently, and how firms can take steps to mitigate them. Ghanem notes that the cash-on-delivery schemes is still prevalent in much of Asia, and that this complicates transactions and results in increased costs. As for Leishman, he believes that right now, there is a complacency among banks and account issuers, and that background checks need to be stepped up to prevent fraud.
In contrast, both Arredondo and Shinghal note that the greatest challenge facing the payments industry is the fast pace of innovation. Arredondo notes that payments companies need to get on top of this fast-moving space, bringing in innovations such as prepaid credits payments. Shinghal agrees, and adds that there are increasingly many flighty, fly-by-night solution providers springing up, cheating users of their money and reducing confidence in the payments ecosystem. He ends off the session by noting that the best payment systems are invisible to consumers.